US$2.9 billion alliance includes an agreement for Sharp to license its IGZO screen technology.

Sharp says it is forming a US$2.9 billion alliance with China Electronics, which includes an agreement to license its power-saving IGZO screen technology to the Chinese manufacturer.

Reuters reported on Thursday that the venture will set up an LCD plant with the goal of mass producing panel displays for televisions, notebook PCs, and tablets in 2015. China Electronics will own 92 percent of the new venture.

IGZO screens boast power consumption as low as a tenth of conventional LCDs, as well as high resolutions and faster reaction speeds. Sharp does not exclusively own the technology, though, but is simply the first to commercialize it, the report noted.

The new joint venture will represent a total investment of US$2.9 billion for Sharp. When approached by the newswire, a spokesperson from the company declined to state how much in royalties it expects to receive from the technology transfer. However, he noted a portion of the proceeds will be used to fund Sharp's 8 percent stake in the joint venture.

Agreements inked between companies in Japan and China are few since tensions over the disputed Senkaku and Diaoyu Islands escalated last year. Just last month, Japan's leading electronic appliance store Yamada Denki left the Chinese city of Nanjing after opening its store for a year. It cited tensions between both countries and "obstructive behavior" from rival companies and price wars as reasons for its departure.

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